Investors' interest in meal subscription services is declining

Investors' interest in meal subscription services is declining

Data shows customers do not use the services for more than a few months.

January 8, 2018
Wall Street Journal
Consumer Watch

Investors are losing their appetite for meal kits.

Just a few years ago, the business of delivering packages containing premeasured ingredients that people assembled into meals was a novel one, drawing hundreds of millions of dollars from venture capitalists and other investors.

Now, many are questioning the viability of meal-kit startups given logistical hurdles, the high cost of attracting and retaining customers and the arrival of often bigger rivals.

An estimated 70 percent of customers of Blue Apron Holdings Inc., APRN -2.01% the largest such provider, stop regularly buying its meals six months after signing up, while more than 80% of HelloFresh S.E . HFG -0.58% users weren’t active, according to Daniel McCarthy, an Emory University professor who researches meal kits and other subscription services.

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